Dow down nearly 700 points at jump, then rebounding sharply (still down). Asian and European markets plummet overnight. G7 finance minister meeting today must result in a comprehensive plan that includes:
On the U.S. side, there must also be a plan to let judges renegotiate home loans and, ultimately, lots of New Deal type stimulus.
My opinon? Hold on tight.
Roubini is going to the G7 meeting. He has been the most accurate forecaster of this meltdown dating back to last year. The headline of his post yesterday? “The world is at severe risk of a global systemic financial meltdown and a severe global depression”
Again, nothing to do but hold on tight. And if you’ve got the money, maybe buy gold. Or, if you’re feeling lucky, buy stocks. Eventually, there are going to be great buying opportunities. Are we at bottom now? I don’t know. I can’t see the market below 7,000. But that still leaves a 1500 point drop.
If the G7 ministers do their job and announce a plan today, I think it might (emphasize might) be a good time to look for bargains on recession proof stocks like, say, Proctor & Gamble or RalCorp.
(Disclosure: I own stock in both companies.)